Think for a minute about how you used to book your holidays, buy your music, find an address or select insurance – 10 or even 5 years ago? Do you even bother to search for things these days or do you just rely on the recommendations from your network via Facebook, Twitter, Zemanta or even Amazon?

These prolific and radical changes are not limited to social and consumer interactions on the internet. They also impact the nature, shape and conduct of business both internally and externally.

Companies are increasingly working in networks, whether they be loosely coupled or tightly integrated because of technology and the globalisation that technology has brought with it. Those networks are essentially virtual entities, and this trend will accelerate over the coming years. To be in or join a network, people need insight and connections, as well as appropriate processes capable of supporting various business needs across the virtual entity. That signals fundamental shifts in the way people do business and the underlying business models.

This was one of the issues Leo Apotheker (co-CEO and a member of the Executive Board of SAP AG) and Andrew McAfee discussed during an interview with Charlie Rose earlier this week.

It echoes the message from Pisano & Verganti in their article Which Kind of Collaboration is Right for You? (Harvard Business Review December 2008):

In an era when great ideas can sprout from any corner of the world and IT has dramatically reduced the cost of accessing them, it’s now conventional wisdom that virtually no company should innovate on its own. … [But] greater choice has made the perennial management challenge of selecting the best options much more difficult. … [How] open or closed should your firm’s network of collaborators be? And who should decide which problems the network will tackle and which solutions will be adopted?

Those opportunities and challenges are equally applicable within organisations, with changes affecting the way people are now able to work together and the nature and style of management. Everything happens and needs to happen so much faster just so businesses can stay in the same (market) position and not loose ground to competitors. But whilst the technology is there to expedite work processes and help people work better and smarter, often barriers in the form of cultural, organisational and behavioural changes are stifling.

As McAfee points out, it’s in this ever-changing technology context that management is being pressed more than ever to rethink the boundary between (i) control -> dictating how things will be executed and by who and (ii) autonomy -> allowing people to organise themselves and seeing what emerges. Frederic Baud explores similar themes in his interesting post Will Enterprise 2.0 ever enter big organisations? More particularly, he considers whether an organisation viewing itself as an internal market where resources can freely recombine to pursue emerging projects can greatly augment the output by loosing control of the nature of that output. The ensuing discussion is also worth a read!

In any case, the ‘control’ model prevails in many orgaisations, where decision-making processes are closed or simply pay lip-service to employee involvement, the few decide for the many based on their view of what people want, and networking of information and expertise occurs in very localised instances.

Yet when we look around for examples of successful businesses to emulate, who do we look to? Google? Proctor & Gamble? Toyota? Hubbards? Headshift 😉 ? There are plenty more. And what do they tell us? Well, to quote Eric Schmidt – Google CEO (The Mckinsey Quarterly November 2008):

There’s a lot of evidence that groups make better decisions than individuals. Especially when the groups are selected to be among the smartest and most interesting people. The wisdom of crowds argument is that you can operate a company by consensus, which is, indeed, how Google operates. …

One of the things that we’ve tried very hard to avoid at Google is the sort of divisional structure and the business unit structure that prevents collaboration across units. It’s difficult. So, I understand why people want to build business units, and have their presidents. But by doing that you cut down the informal ties that, in an open culture, drive so much collaboration. If people in the organization understand the values of the company, they should be able to self organize to work on the most interesting problems. And if they haven’t, or are not able to do that, you haven’t talked to them about what’s important. You haven’t built a shared value culture.

For me, those views are examples of organisational learning theory in practice. I’ve described the themes within that theory before, and for present purposes would just like to reiterate a couple of those themes:

Learning requires challenging existing mindsets that form the basis of (possibly out-of-date) behaviour.

Managers should encourage the generation and spreading of new ideas and practices about purpose, values and vision.

That vision requires the maximum number of people to contribute to and share a picture of the where the organisation is going, and how personal and business goals coincide.

Feedback is central to this system as it is critical to learning and adaptation.

Those ideas have been around alot longer than much of the technology that has caused such radical change to the way things are done in the public domain. That same technology is steadily entering and disrupting the way things are and can be done in organisations. But for that technology to be of real value, progress needs to occur simultaneously in respect of each of those ‘organisational learning’ elements. And if you’re reading this thinking that this type of change doesn’t apply to your business or your industry sector, best you start with #1 on that list.

‘Collaboration’ is being used pretty loosely these days and often in the same breath as enterprise 2.0. But, simply because people work together to meet objectives and reach goals, doesn’t mean they are collaborating. Other ‘c’ words like communicating, co-operating or co-ordinating may be more appropriate descriptions of what is actually taking place.

By recognising the nature of the interactions, we can better understand the restrictions of, and relationship between, the associated behaviours. We can then focus more sharply on initiatives which (i) improve controls and efficiency, or (ii) add value through creativity and innovation, or more ambitiously (iii) both! In terms of technology, that aids in the design and implementation of appropriate spaces for people to work in, equipped with the right tools to facilitate the capture, exchange and creation of information and expertise.

‘Communication’ refers to how people understand each other and how information (including prospects, rumors, feelings and failures) is transferred. Often the problem of communication is thought to be solved with more newsletters, memos and meetings – which often serve only to waste more time by circulating floods of irrelevant generic news and distracting people from the critical activity of listening. Now there’s nothing wrong with noise, provided the means are available to filter the things worth listening to, and then something constructive can be done with the filtered information.

‘Coordination’ is about efficiency and making sure people know when and how to act. Because of natural overlaps in organisations, it is important for people to have visibility of what others are doing to avoid redundancy or inconsistency. Whilst coordination tries to get people pulling together, the effort must nevertheless be directed towards a desired goal.

‘Cooperation’ is a factor in moving in a unified direction, but highest value doesn’t derive from group think and continually following established norms. Consequently, it needs to be balanced with diversity, and the spark of creativity which comes from ideas, dissent and debate.

Whilst the above ‘C’s tend towards controlling and centralising efforts, ‘collaboration’ is about creation and is the driver of innovation. It involves bringing people together to achieve a goal which cannot be achieved by applying more effort to the other ‘C’s. ‘Collaboration’ thrives on difference, insight and spontaneity, rather than structural harmony. As such, it requires a shared space, time and environment to allow people to devise the solution to meet the goal.

Conventional enterprise technology that accelerated people’s productive 10 years ago no longer has the same impact, and in fact is counter-productive for many workers in today’s global, information overloaded environment. The classic example here is the systemic overuse of email as the means to facilitate each of the ‘C’s. Whilst email doesn’t necessarily need to be replaced, it does need to be put in its place. And with the range of social tools presently available, companies’ competitiveness will depend on identifying and adopting those tools which best suit their work processes. In fact, when integrated in a platform, social tools can facilitate new models of interaction, co-creation, collective intelligence, networking and user participation, whilst supplementing traditional face-to-face, telephone and email communications.

This is precisely what Gary Curtis of Accenture was reporting in yesterday’s Financial Times (5 November 2008):

“At Proctor & Gamble … an internal social network modeled closely on YouTube is proving effective for communicating complex programme initiatives and for better connecting large, geographically dispersed teams. … Other consumer-oriented [social tools] are proving equally beneficial in enterprises. Members of a team at a multinational had been sending as many as 150 emails a day discussing their project while never being certain of involving the right people. When they moved the discussion to a blog, their email boxes emptied, and the key team members joined in as needed.”

These examples illustrate how efficiencies can arise from facilitating better communications and coordination of efforts. We are also seeing improvements to these ‘c’s through the use of personal dashboards. They are ideal for allowing people to easily add content, and organise their feeds and information widgets. As a result, people have precisely the information they want, in the manner they want to receive it, which helps increase their productivity and connections. And because people’s activities and interaction with content are aggregated, everyone has a clear up-to-date picture of each other’s work, status, interests, favourites and connections with other people in the firm.

Enabling people to interact with information and each other in this way has a dramatic (measurable) effect on people’s productivity, by reducing the amount of time spent looking for information and expertise, or re-doing work completed in another business unit. It also means that people send and receive fewer emails and instead get more precise requests for assistance.

We have also seen how teams are better able to co-ordinate their resources through group spaces (e.g. in wikis) and online discussions (e.g. in group blogs). Those tools give people visibility of a range of information, including recent or important projects, actions, discussions, comments, news and events, and ensure people know who’s working on what. With greater delivery of information, and its filtering using tags and ratings, the immense flow of information which now inundates people can instead be tailored to their needs, put into context (e.g. of a project, client matter, pitch or operation issue), and made more relevant to daily work.

Instead of broadcasting information in mono-directional newsletters, people can engage in discussions. And through those discussion, views can be debated, actions negotiated and common goals established. But that requires the creation of spaces where people feel confident about participating and that it is worthwhile to do so. In other words, to ‘get with the group’ there needs to be a culture which accepts that people don’t necessarily add value by contributing non-contentious thoughts. Consequently, ‘cooperation’ in the enterprise 2.0 sense provides the space and leadership to cope with challenges to existing norms, processes and assumptions.

Improvements to each of the above ‘c’s sets the stage for a culture and organisational structure conducive to creative and collaborative work practices. Practices that thrive on spontaneity and interaction, and result in the types of innovative products and processes which give a company its edge. Practices that are so well supported by new social technologies, such as facilitating social connections between employees split by geographical and organisational distance, increasing people’s peripheral vision and thereby enabling them to stay up-to-date with and share information, ideas and expertise, and ensuring they can easily create communities of practice built up around conversations and common interests revealed through on and off line activity.

Therefore, providing workers with more flexibility in how they communicate with each other, and customers, can result in new forms of cooperative action, more fruitful collaboration, faster decision-making, and greater productivity. And whilst its a question of ‘when’ rather than ‘if’ companies introduce social tools, having a clear view of the driver for their introduction (i.e. tending towards efficiency or value-added/innovation) will ensure the appropriate technologies are implemented and organisational behaviours nutured.

The 13th annual technology survey of AM Law 200 firms makes for a disappointing read from a social software/organisational change perspective. The report suggests that firms are grappling with issues like “what emerging technologies are worth investing in – and which aren’t ready for prime time”. However, in respect of ‘collaborative’ technologies respondees were asked only whether their firms use web conference software, blogs or wikis. What! No mention of RSS, feed readers or aggregators, let alone micro-blogging, friendfeeds, personalised pages, social tagging or content filtering.

Of course firms are thinking about it! Else they will find themselves sitting on the wrong end of the technology commoditisation process which turns yesterday’s shiny innovation (*email*) into today’s ubiquitous baseline or even legacy tool. Not only do such tools offer no competitive advantage, they also trigger negative consequences, like information overload and silos of out-of-date content.

And the examples in the report of how blogs, wikis and social networking tools are being used in firms certainly are ‘ho-hum’. From adoption and knowledge sharing perspectives, the Allen & Overy use of group blogs (integrated into wiki spaces) for knowledge networking is far more instructive. As for wikis, they can be used to capture ideas, questions and comments in respect of groups or projects, and then to aggregate all interactions with content, so as to highlight recent activities, popular and/or salient items (from an individual or group perspective). All these collaboration activities are quite distinctive, yet supplementary to, document management activities supported by other systems, as these articles illustrate:

Those are just a few examples of how firms are endeavouring to adapt and apply new techologies to help people work in smarter more social ways. And there are even greater opportunities for the ‘re-engineering’ of knowledge intensive processes in business through technology. As Simon Wardley has emphasised, unlike previous generations of technology, which essentially offered the opportunity of ‘substitution innovation’ (doing what had always been done a little better), new technologies like RSS, micro-blogging, social tagging and networking tools, offer possibilities for radical change in the way in which things are done.

These are some changes we are seeing or expect to see very shortly through the use of integrated platforms incorporating a range of social tools:

Reducing information retrieval costs by encouraging users to employ monitoring and delivery modes of information retrieval rather than searching for information or navigating to static destinations (like external sites). The former modes rely on RSS feeds delivered to feed readers, blackberries or mail accounts.

Eradicating the static expertise directory and instead pulling information from the user’s activities, including blog posts, comments, tags, feeds and favourites into a dynamic ‘public’ profile which provides a rich picture of the user’s status, work, professional network, expertise and interests.

Providing personal dashboards to allow people to design and control his/her interactions and information flows to best suit their changing needs. That means allowing people to easily add, organise and view activities, discussions, news, feeds, communities, colleagues, etc,

Delivering more targeted relevant information by recommending and filtering information based on the individual’s tags, subscriptions, or activity with content, communities, projects or individuals.

All examples of how firms need to continuously adapt just to stand still.

Another addition to the open-source participation economy is the contest for the creation of new futures contracts. It is being staged on MarketsWiki – an online open source knowledge base for current and historical information about the global exchange traded capital, derivatives, environmental and related OTC markets, with idea and opinion contributions being encouraged from investors and traders alike.

The ‘Great Contract Challenge‘ provides another illustration of the prospective benefits of crowd sourcing. In other words, tapping the ‘wisdom of the crowds’ offers greater innovation potential than traditional approaches which have viewed and relied on exchanges as the source of new/novel financial instrument creation. Prospective customers’ involvement in the design and selection of those instruments which appear most promising, should also constitute a form of natural selection and help ensure only the fittest new products make it to market.

Aside from the shift in mental models, the contest also underlines the departure from traditional approaches to control – of information and processes – and a move towards participation, transparency and democratised decision-making. Admittedly, the contest is being staged in the public domain, where such ideas have already found fertile ground, and social networking and idea-sharing sites, and technologies in support thereof, are now relatively commonplace. Nevertheless, there’s also increasing evidence of this type of change occurring in many professional service organisations, not least of which being their growth in the adoption and adaptation of social tools tailored to suit their business purposes.

Even if those organisations don’t subscribe to an ‘innovate or die’ approach apparent in the derivatives sector, they still need to pay careful attention to the strong steady changes fostering teamwork, dialogue and learning, being nutured by their more adventurous competitors. To that end, we’re now seeing ever increasing interest in the customisation and use of tools such as wikis, blogs, social bookmarking, tagging and RSS to help better connect knowledge workers with current relevant information and expertise to extract value from complexity and commoditisation alike. Those same tools which support MarketsWiki and other collaboration environments.

As noted by Bruce MacEwan in his recent blog about law firms, billing hours and complexity:

“There will always be both [‘expert’ and ‘commoditized service]. That said, I think what constitutes either will evolve. Some of what is viewed as expert now – will devolve into commodity. New areas (unseen before – maybe new types of financings to emerge from the current crisis) may be the new “expert” (i.e., the always-sought-after high value engagements) areas.

To lubricate this information -> knowledge transformation cycle, and for firms extract value from it, they need to make it far easier for their staff to generate, find, share and use information and expertise. One straightforward way to do this is through systems which flex, shape and emerge depending on what people are trying to do. Systems which not only give people a better platform on which to work, but which can also make use of the trails people create as they search, bookmark, rate or view things – all very simply stuff focusing on supporting and gathering intelligence from people’s interaction with the system. And when these individual activities are aggregated, they provide powerful indicators of what is most useful or important to people across the breadth of the organisation. Another example of crowd sourcing – but this time applied internally – to tap the wealth of (informal) sharing which often occurs in casual exchanges, via email or other channels, and can so easily be lost in organisations which fail to innovate, or at least improve, their current information and technology environments.

Last week, I went along to the RSA to listen to Charles Leadbeater talk about his book “We Think”, research and thoughts on the web and the web’s effect on mass creativity, innovation and collaboration. He indicated how the web has created new vantage points on old questions (e.g. effect of technology on societal change and the scale of such change) and new dichotomies (e.g. sharing vs making money, and autonomy vs authority, where online collaborations create new hierarchies and different forms of ‘control’). This provided the context for the central themes of his book, namely

Ethic of Participation:* Prior behaviour characterised by ‘work during the day’ and ‘consuming or engaging in social pursuits by night’ is becoming more complex, and being blurred by people (who are ‘amateurs’) creating things in their leisure time (traditional ‘consumption’ time) to a very high standard, and using those outputs during work time (e.g. open source s/w).

New ways to collaborate:* Involving hierarchies, but of a different kind to those which we are accustomed, being more meritocratic, transparent and fluid. That is leading to new forms of organisation, which allow us to imagine how we can get stuff done together, as well as giving us new perspectives on control and value chains – now being more like hives or nests.

New motivations: Which asks us to look at why people are contributing to the content and community of the web. Some motivations revolve around recognition. The implication being, that if businesses/organisations don’t get it, they are not going to be creating environments where people will contribute (creatively and innovatively), nor will the businesses/organisations themselves be contributing (or able to do so).

Ethic of Sharing:* How wealth in the broadest sense gets generated in an economy of ideas. He suggested that the above three themes invite us to think about wealth creation in entirely new ways, and to depart from traditional models of closed investment/ownership/private property (historically) being the necessary ingredient for the development/exploitation of primary goods, labour, ideas and innovation.

These themes in turn raise considerations about freedom and its relationship with creativity – where one is perhaps derived from experiencing the other and forms part of the new ‘motivation’. It also raises the question about how deep the participation culture will go when, for example, ideas are circulated and one organisation alone profits from their exploitation. In other words, where people are choosing to do things in different ways, and are participating in new modes of on- and off- line collaboration (made possible by the web and the variety of technology available to users), what type of sharing models are available in a world based on wealth, and how do we innovate the business models themselves (not only the products and processes)?

In one area, new models have been facilitating the flow of resources and action to issues that need addressing even where there is no (or little) money to be made. Take Kiva for example. Kivais the world’s first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world. Guy Kawasaki explains that Kiva’s model involves a minimum $2.50 voluntary fee that lenders pay when checking out their “shopping cart.” Consequently, lenders receive no interest and pay a voluntary fee to Kiva in order to loan money. Great business model! Relying as it does on people’s motivation to share and participate in the building of an online community (and to pay to do so). Here, innovation in technology (web) and the business model itself has facilitated pockets of local action, which collectively, are having a tremendous global effect. This type of thinking and action is also behind many climate change initiatives, not least of which being Do The Green Thing.

In other areas, the discussion surrounds the organisation, and its generation and exploitation of ideas and knowledge. Chesbrough explores these ideas in his recent book “Open Innovation: The New Imperative for Creating and Profiting from Technology“. He discusses the departure from prior models which relied on creativity within the firm, to the need for innovation in the business model itself (i.e. models of ‘open innovation’) which enable firms to tap ideas of customers and users and involve customers as co-producers. It also requires ideas to flow – into and out of the business – requiring a different approach to control and the creation of value.

Proctor and Gamble is perhaps one of the more famous examples of open innovation, actively seeking user-community participation in developing new product ideas. Another interesting ‘environmental’ example, promoted by the World Business Council for Sustainable Development (WBCSD) and IBM, is the “Eco-Patent Commons”. That initiative makes available patents to “encourage researchers, entrepreneurs and companies of all sizes in any industry to create, apply and further develop their consumer or industrial products, processes and services in a way that will help to protect and respect the environment”. Then, there’s Free Beer (thanks for the reference Eliot!). It’s ‘free’ in the sense of “freedom”, not beer give-aways. The organisation is using Creative Commons licences to give public access to the recipe and brand (for pleasure or profit). Usual terms apply: “If you make money selling their unique beer, you have to give them credit and publish any changes you make to the recipe under a similar license”. All the writing about ‘wisdom of the crowds’ suggests that the Free Beer recipe could be the best one yet!

Coming back to the themes above, about motivations, sharing and profiting from ideas, Leadbeater is suggesting that it’s unlikely that people will be satisfied with being anonymous contributors to a company’s ideas – they want a certain level of autonomy/freedom to create and to be appropriately recognised for their contribution. And this is where many organisations are still getting it wrong by not understanding what is motivating people to participate, collaborate and share their thoughts. As illustrated in the above examples, for this to happen, companies have to give away control to allow ideas and creativity to flow (and perhaps control over a range of their IP) which is probably counter-intuitive for many organisations.

I was curious to discover whether wikis are acting as more than just a technology enabler for information dissemination within organisations, and if they could serve a deeper function of facilitating changes to culture and stimulating organisational learning practices.

Consequently, I asked survey repondents and interviewees (i) what factors facilitate collaboration in the company, and (ii) whether those factors were prerequisites for successful wiki implementations or if wikis could be used as a means to develop better collaborative work practices.Common threads throughout the responses to (i) highlighted the need for organization-wide communications, access to/sharing of information/knowledge and a willingness to contribute/collaborate.In respect of (ii) views diverged.Some interviewees considered that, whilst wikis can provide a solution to the problem of locating information, they simply support existing information sharing/communication practices, since politics and cultural issues often hinder wiki usage.However, others considered that wikis encourage transparency by “questioning how people are thinking” and “can be used to increase awareness of people’s contribution to the workplace”.

Ross Mayfield of SocialText concurred with the latter view stating that “the best thing a wiki can do is to make transparent an existing culture.It can change culture overtime but if you try to introduce it into a controlling environment too quickly the entire notion of it will get slapped down”.That emphasizes the importance of ‘managing’ wikis’ incremental implementation so as to build towards a supportive user-community.

I also asked survey respondents to characterize their companies before and after the wiki implementation based on factors derived from the literature review.The overall picture is one of change towards ‘learning organisation’ characteristics (even if only slight in some areas).The greatest shifts occurred in relation to the level of information flows and new ideas being sought/tried, and people’s willingness to help one another carry out work.These changes appear to have occurred in a relatively short timeframe, with 47% of wiki installations being under a year-old. Most respondents considered that the wiki implementation has a minor (27.72%) to moderate (30.69%) impact in shaping companies’ characteristics.

Furthermore, the apparent benefits to be gained from wiki implementations in relatively short periods seem to have rather modest barriers/disadvantages, where survey respondents considered time to contribute (11.67% of responses), and reliance on email (11.67%) to be more significant barriers to wiki usage than culture (9.05%) and lack of managerial support (7.14%).That maybe partly attributable to the climate of openness and trust, and other learning characteristics, which organisations were considered to possess prior to the wiki implementation.

Consequently, the evidence suggests that wikis have improved organisational information flow, enabled people to work/communicate more efficiently and effectively, learn from past experience and share knowledge/ideas, in organizational contexts which are not averse to collaboration and learning.Accordingly, wikis have provided platforms for collaborative and emergent behaviour, which could not satisfactorily proceed through existing technology.

Time will tell whether the reported changes in certain organizational learning characteristics continue to grow and become more pronounced as wikis mature.Certainly, the level of grassroots’ implementations, facilitation and organic growth, illustrate instances of people at operational levels challenging mindsets regarding work practices and the utility of existing systems, experimenting with new solutions and adopting individual/team practices (including peer-to-peer learning) conducive to double-loop learning.

To grow this behaviour across the company and tap people’s “massive undeveloped potential” (Moss-Jones (2005)), management must be more alert to those initiatives and address barriers which inhibit wiki use.To that end, undertaking activities proposed in the wiki management cycle offers managers opportunities to engage in organizational learning practices and develop corresponding capabilities.

So, whilst there is much more to organizational learning and much more than can be supported by wikis alone, I think their use/management maybe informed by practices associated with the ‘learning organisation’ which in turn may facilitate changes to culture and stimulate organisational learning practices, making wikis more than a mere technological enabler for wider information dissemination.

Risk of abandonment if users do not perceive a clear need for, or benefit from using, wikis or other barriers to their use are not overcome.

Those difficulties raise specific issues about wikis’ management and use, the effect of organisational context (i.e. structure and culture) on wiki uptake, and more generic issues about adoption of innovations. Similarly, a business’s ability to collaborate effectively reflects issues at the heart of technology management, namely improving the effectiveness of an organisation and its people through the application of concepts and techniques for operating, improving and integrating an organisation’s systems, and introducing innovatory systems.